CHS official: Building permit fee too high

Farm Forum

SPIRITWOOD, N.D. – A $1 million building permit may be too high a price for the proposed $1.5 billion CHS Inc., nitrogen fertilizer plant, according to Dan Mack, vice president for rail transportation and terminal operations for CHS. Mack spoke to the Spiritwood Township Board of Supervisors on Oct. 14.

“There is a significant cost to the building permit,” he said. “If we moved one section east it would be in Barnes County.”

Actions by the Spiritwood Township Board of Supervisors Oct. 14 will give residents a chance to voice their opinions on those costs.

The current cost of a building permit in Spiritwood Township is $1 per $1,000 of building cost, according to Clarence Daniels, chairman of the Township Board of Supervisors. This would result in a building permit cost of about $1 million depending on the breakdown of building and equipment costs on the $1.5 billion project.

“CHS has indicated it’s not interested in paying a million dollars for a building permit,” Daniels said.

Daniels said CHS could pay as much as $450,000 per year in property taxes to the township when it begins paying full taxes.

“That would more than double the township revenues,” he said.

Daniels also estimated CHS would likely pay no taxes for about seven years and then partial taxes for about three more years. He based the estimate on three years of construction followed by a four-year full tax exemption followed by three years of increasing taxes until the property is taxed at its full rate.

Daniels said the Stutsman County Commission has not acted on any tax exemption for CHS but based his estimates on the county’s actions on recent tax exemption requests.

The idea of reducing the cost of the building permit drew criticism from some township supervisors.

“I think CHS coming in is a great thing,” said George Quigley. “But they didn’t come in blind. This $1 per $1,000 has been on the table a long time.”

Mike Scott felt the likely delay in property tax revenue warranted a higher building permit fee.

“We’re not going to get taxes for seven years while they drive on our roads,” he said.

Mack said the company is not requesting a free building permit.

“We’re looking for something that is fair and reasonable,” he said. “One thing the local community can do to move this along is lower the building permit fee.”

A final decision by CHS on the project is expected next spring, Mack said. If the project moves ahead, construction could start later next summer.

Dale Van Erem, clerk for Spiritwood Township, had prepared an alternative building permit fee structure. The new structure included a sliding scale that started at $1 per $1,000 for projects of less than $100,000 with rates declining to 2 cents per $1,000 for projects more than $1 billion.

This schedule resulted in a building permit fee of about $90,000 for the nitrogen fertilizer plant project. Mack said it was higher than the $10,000 his company had proposed initially but would be acceptable.

Daniels did not challenge the upper-end costs of the plan but suggested the building permit costs for smaller projects also be lowered.

“If we are changing the permit for CHS we should change it for the guy building a garage in his backyard,” he said.

The topic will be discussed at a township meeting open to all residents. The same meeting will also discuss options for the gymnasium and community rooms in the school building previously used by the Spiritwood and Barnes County North school districts and owned by Spiritwood Township.

A previous meeting had resulted in a vote to advertise to sell the building on bids out of concern for high heating costs, Daniels said. Further research had indicated a portion of the building could be heated for public meetings at a lower cost.

The township supervisors did not schedule the special meeting but said a letter would be sent to all residents of the township with information on both topics.